Ladwa family dispute in court over management of Golden Tulip hotels

By Bernard James

Dar es Salaam. The legal dispute over the management of Indian Hotels Limited, owner of Golden Tulip Hotels, took another turn after the Court of Appeal refused to hear a petition challenging the High Court’s decision to recognize certain shareholders of the society.

The highest court has rejected the application of a businessman, Jitesh Jayantilal Ladwa, who lost the second attempt to overturn the High Court’s decision recognizing Dhirajilal Walji Ladwa, Chandulal Walji Ladwa and Nilesh Jayantilal Ladwa as administrators of the society.

Jitesh is one of the shareholders in various companies owned and operated by Walji Ladwa’s family.

Other company shareholders accused him of mismanaging the company’s affairs and refusing to recognize them.

They also accused the businessman of preventing other shareholders and directors from accessing the company’s offices by using private security guards.

The High Court hears the dispute

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After several months of twists and turns in the business, the three respondents – Dhirajilal, Chandulal and Nilesh – successfully petitioned the High Court in 2020 to restore their status in the business.

They had asked the court to declare Jitesh’s conduct and operation to be unlawful and harmful to the company’s interests.

They had also asked the court to declare them shareholders, directors and partners of the company.

Mr Jitesh strongly resisted the petition which is still pending in the Commercial Division of the High Court.

He argued that the case was flawed and untenable for lack of a supporting affidavit to verify the motion. He asked the court to dismiss the motion which he said could also affect another case pending before the court.

After hearing the parties, Judge Deo Nangela sided with the petitioners and declared them shareholders and directors of the company.

The court held that the respondents’ acknowledgment complied with section 233(1) of the Companies Act, which only allows a member of a company to bring proceedings before the court if they believe their company is being mismanaged.

Jitesh before the Court of Appeal

In an attempt to overturn the High Court’s decision, Jitesh filed his first petition with the Court of Appeal and asked the High Court to review the High Court’s decision which recognized the co-directors.

He argued that the judge erred in declaring the respondents to be shareholders and directors of Indian Ocean Hotels Limited when the parties had not yet been heard.

He further argued that the judge erred in ruling that the motion before him was not under judicial consideration and therefore barred from consideration elsewhere.

After hearing the parties, the higher court sided with the respondents, saying that the acknowledgment of the directors before the case was heard was merely an introduction to the parties pursuant to section 233 (1 ) of the Companies Act.

The provision of the law only allows members to go to court if they believe their company’s affairs have been mishandled.

Jitesh was aggrieved by the decision and filed the second claim with the Court of Appeal, this time asking the court to review its own decision.

He argued in the second claim that the court erred when it failed to accept that the recognition of the claimants as shareholders and directors of Indian Ocean Hotels Limited was not a mere remark. introductory statement but went to the root of the whole dispute.

According to him, the applicants’ ownership and leadership were among the issues in dispute in a case pending before the same court.

Mr. Jitesh was represented by Mr. Jeremia Mtobesya while Mr. Richard Rweyongeza appeared for the respondents.

Application rejected

Appeal judges — Gerald Ndika, Panterine Kente and Othman Makungu recently dismissed Jitesh’s claim, saying whether or not defendants are directors and shareholders of Indian Ocean Hotels Limited does not affect a pending case before the court because the parties had not been heard on this subject.

“It is needless to say at this point that the question of whether or not respondents are directors and shareholders of the second respondent must be resolved by the conventional judicial process of hearing from both parties to the lawsuit,” the judges said.

The judges referred to Section 5(2)(d) of the Appellate Jurisdiction Act (AJA) which prohibits appeal or applications for review against any preliminary or interim decision or order of the High Court if such decision or order does not have the effect of definitively determining the suit.

Although they agreed that the judge prematurely declared the respondents directors of Indian Ocean Hotels Limited, their involvement meant no relief for the businessman.

“We believe that by any stretch of the imagination, these grounds cannot by themselves form the basis of a review. We reject them accordingly. We would like to point out that in fact, ironically, the petitioners are essentially asking the court to be wrong where it was right.

“From our respective perspective, what should not be doubted here is the indescribable fact that either the petitioner is aggrieved by the court’s contested decision, now, once again, he is determined to have it set aside whether it’s the last court on earth or…

“…if we may be pardoned to say, they are determined to adjourn the hearing and final determination of the motion which is still pending in the High Court…” the judges said.

Citing the case of Blueline Enterprises Ltd v East African Development Bank, the tribunal insisted that mere disagreement with the viewpoint of the tribunal’s decision cannot constitute grounds for review. and that the parties cannot challenge such a decision on the pretext that another point of view is possible within the framework of the jurisdiction of review.

In a case still pending in the Commercial Division of the High Court, the three shareholders have asked the court to permanently prevent Jitesh from entering the company’s offices and participating in the management of the company’s affairs.

They also asked the court to order civil lawsuits against Jitesh to compel him to account for alleged losses and trade distortions suffered as a result of embezzlement of company funds and mismanagement of the company.

They also sought an order to compel the businessman to leave the office and business premises intended for company use only and to move his personal business ventures from company premises.

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